INDEPENDENT DIRECTORS AND FIRM VALUE: NEW EVIDENCE FROM THE 2023 REGULATORY REFORM IN CHINA

Purpose– Labour market constraints constitute prominent obstacles to firm development and economic growth of countries located in the Middle East and North Africa (MENA) region. The purpose of this paper is to examine the implications of firm characteristics, national locations, and sectoral associations for the perceptions of firms concerning two basic labour market constraints: labour regulations and labour skill shortages.Design/methodology/approach– The empirical analysis is carried out using firm-level data set sourced from the World Bank’s Enterprise Surveys database. A bivariate probit estimator is used to account for potential correlations between the errors in the two labour market constraints’ equations. The authors implement overall estimations and comparative cross-country and cross-sector analyses, and use alternative estimation models.Findings– The empirical results reveal some important implications of firm characteristics (e.g. firm size, labour compositions) for firm perceptions of labour regulations and labour skill shortages. They also delineate important cross-country and cross-sector variations. The authors also find significant heterogeneity in the factors’ implications for the perceptions of firms belonging to different sectors and located in different MENA countries.Originality/value– Reforms in labour regulations and investment in human capital are important governmental policy interventions for promoting firm development and economic growth in the MENA region. This paper contributes to the empirical literature by analysing the factors influencing the perceptions of firms located in the MENA region concerning labour regulations and labour skill shortages. It provides policy-makers with information needed in the design of labour policies that attenuate the impacts of labour market constraints and enhance the performance of firms and the long-run economic growth.

Labour market constraints constitute prominent obstacles to firm development and economic growth of countries located in the Middle East and North Africa (MENA) region. This paper aims at examining the implications of firm characteristics, national locations, and sectoral associations for the perceptions of firms concerning two basic labour market constraints: labour regulations and labour skill shortages. The empirical analysis is carried out using firm-level dataset sourced from the World Bank’s Enterprise Surveys database. A bivariate probit estimator is used to account for potential correlations between the errors in the two labour market constraints’ equations. We implement overall estimations and comparative cross-country and cross-sector analyses, and use alternative estimation models. The empirical results reveal some important implications of firm characteristics (e.g., firm size, labour compositions) for firm perceptions of labour regulations and labour skill shortages. They also delineate important cross-country and cross-sector variations. We also find significant heterogeneity in the factors’ implications for the perceptions of firms belonging to different sectors and located in different MENA countries. This paper provides policy-makers with information needed in the design of labour policies that attenuate the impacts of labour market constraints and enhance the performance of firms and the long-run economic growth.

The effectiveness of the mandatory disclosure of independent directors’ opinions: Empirical evidence from China

Does independent directors’ monitoring affect reputation? Evidence from the stock and labor markets

Introduction: In current eras, supervisory bodies have interceded in the operations of Deposit Money Banks. This is because they are confronted with plethora of problems such as overexpansion; corruption of bank officers, inappropriate risk management and these resulted to poor financial performance.
 Aims: The present study aims to focus on the link amid board independence and financial performance of Deposit Money Banks as well as providing a comparative view by focusing on Nigeria and Canada.
 Methods: This study seeks to observe the association amid board independence and corporate financial performance of Deposit Money Banks in Nigeria and Canada. The panel data methodology is widely recommended for it is useful when data is a blend of time-series and cross-sectional features. The study applied secondary data extracted from annual financial statements of Deposit Money Banks quoted on the Nigerian Stock Market and in the Canadian stock market between the ten years period of 2008 and 2017.
 Results: The variables considered in this study are return on asset (ROA) (dependent variable), proportion of independent non-executive directors on board (BIND) and audit committee independence (ACI) (independent variables), earnings per share (EPS) and firm size (FSIZE) which are control variables. From the findings, it is revealed that there exists a significant relationship between board independence and profitability of deposit money banks in Nigeria and Canada.
 Conclusion: Empirical results obtained reveal that audit committee independence promoted financial performance of the deposit money banks in Nigeria while in Canada it was positive and insignificant. Thus, a greater proportion of audit committee independence would bring about a greater level of financial performance in deposit money banks in Nigeria and Canada. The aspect of corporate governance implies that banks will profit by increasing the number of its independent directors and independent audit committee members.

Using novel data on independent directors’ opinions in China, we investigate the stock and labor market effects prompted by independent directors publicly saying ‘no’ to major board decisions. We find that the market reacts negatively to modified directors’ opinions, but positively toward the firms interlocked with the directors who said ‘no’. We further find substantial turnover and decline in board seats after independent directors issue modified opinions. Overall, we identify a dilemma in China whereby the labor market does not reward vigilant directors who have stood up to firm insiders, even though investors add a premium to effective board monitoring.

The independent director system has multi aspect influence on enterprises.For public corporations, the connection between the independent director system and the capacity fro innovation of businesses is on of them. Take the state-owned enterprise in Chinese A stock market in Shanghai and Shenzhen from China between 2016 and 2021 as a research sample. This paper uses the basic econometric model to find the correlation between three factors include age, education background and whether independent directors are multiple identities and enterprise innovation through studying enterprise input and output and the number of patents. According to the study, an enterprise's capacity for innovation is favorably correlated with the age of its independent directors. Additionally, the educational experience of independent administrators has a favourable impact on the innovative capacity of an organization. The ability of businesses to innovate is favorably correlated with the identities of several independent directors.

This study investigates how the social connections of independent directors influence the disclosure of corporate social responsibility (CSR) information. Using data from Taiwanese firms listed on the stock market between 2013 and 2019, we employ the propensity score matching (PSM) method to compare the social networks of independent directors in firms that disclose their CSR reports with those that do not. Our findings reveal that disclosing CSR reports positively affects the centrality of independent directors’ social networks. In other words, directors who participate in CSR reporting have greater influence and better access to information within their social circles. This effect is particularly pronounced for firms with more analysts following them. Additionally, our study demonstrates that having more central and well-connected independent directors, along with increased analyst coverage, leads to greater CSR disclosure by firms. These results highlight the importance of diverse and robust social capital in enhancing transparency and promoting sustainable development for organizations.

Drawing on the analytical distinction between agency and social structure, I provide insights into four strategies used by skilled refugees to navigate labour market constraints: pre‐empting, to avoid present labour market constraints; circumventing present constraints, to realise future benefits; persisting in the search for skilled jobs via mobilising longstanding patterns of thought and action; and exercising voice to drive future system improvements that benefit similar others. It is striking how these strategies harmonised self‐interest and others' interests. I highlight the interplay between social structure and agency in labour market strategies to depict skilled refugees as reflexive agents of change. I highlight gender‐based nuances in skilled refugees' labour market moves and conclude by outlining the implications of my findings for HRM practice.

<p>Drawing on focus group discussions with unemployed young people in Gaborone and Mogoditshane, Botswana, this paper seeks to capture the ideas of young people regarding how labour market entry constraints could be weakened to provide an enabling environment for wage employment and self-employment. The research is framed on the interpretive paradigm that conceives of youth as agents that are skilled, knowledgeable and capable of reflecting on matters that affect their existence. This is contrary to other studies of the labour market that privilege expert knowledge, presenting young people as voiceless, less knowledgeable and overwhelmed by structures. The suggested employment strategies by the unemployed youth were found to be feasible and matching expert knowledge. This justifies a call to pay attention to the voices of youth in the design of youth labour market policies and programmes.</p><p><strong>Keywords: </strong>Youth voice, labour market constraints, employment strategies, Botswana</p>

The generally weak correlation between board independence and firm performance is a major empirical puzzle. One possible explanation is that director independence alone is not enough. To explore this possibility, we examine the full employment histories of independent directors at S&P 1500 companies. We define an independent expert director (IED) as an independent director who has worked in the same 2-digit SIC industry as the company where he/she serves as an independent director. We show that the proportion of IEDs on a board is positively and significantly correlated with firm performance. We find that when the proportion of IEDs is higher, there are fewer earnings restatements and larger cash holdings. Firms with IEDs have higher CEO pay-performance sensitivity, higher CEO turnover-performance sensitivity, and more patents with more citations. Stock market investors react positively to IED appointments. We also find the higher the CEO power, the less likely IEDs will be on board.

The generally weak correlation between board independence and firm performance is a major empirical puzzle. One possible explanation is that director independence alone is not enough. To explore this possibility, we examine the full employment histories of independent directors at S&P 1500 companies. We define an independent expert director (IED) as an independent director who has worked in the same 2-digit SIC industry as the company where he/she serves as an independent director. We show that the proportion of IEDs on a board is positively and significantly correlated with firm performance. We find that when the proportion of IEDs is higher, there are fewer earnings restatements and larger cash holdings. Firms with IEDs have higher CEO pay-performance sensitivity, higher CEO turnover-performance sensitivity, and more patents with more citations. Stock market investors react positively to IED appointments. We also find the higher the CEO power, the less likely IEDs will be on board.

The negative association between education and marriage timing is often explained by an economic independence theory: education provides women with independent economic resources to reject the caregiver role in marriage. However, cross-national evidence shows the importance of cultural and historical continuity in marriage formation. This article examines the relationship between educational attainment and the timing of first marriage in reform-era urban China since the 1980s. Reform-era urban China provides a strong case to examine both theories: it has a strong marriage norm, but it has also experienced a rapid increase in gender inequality in the labor market during the economic reform. Using detailed education and work histories of 3,808 respondents from two waves of the Chinese General Social Survey, this article uses discrete-time hazard regressions to contrast the marriage experience between two cohorts that faced different labor market constraints. The evidence fits better with a path dependence theory. Specifically, the effect of education on marriage timing, for both women and men, is not significantly different between these two cohorts. The results encourage attention to local institutions and local culture in understanding the relationship between conditions in the labor market and marriage formation.

Institutions are defined as the set of rules that govern human interactions. When these rules are discriminatory, they may disempower segments of a population in the economic spheres of activity. In this study, we explore whether laws that discriminate against women influence their engagement in the economy. We adopt a holistic approach where we explore an overall measure of unequal laws also known as legal gender disparities and relate it to several labour market outcomes for women. Using data for over 59,000 firms across 94 economies, we find that unequal laws not only discourage women’s participation in the private sector workforce, but also their likelihood to become top managers and owners of firms. Suggestive evidence indicates that access to finance, property ownership, business registration, and labour market constraints are pathways by which legal gender disparities disempower women in the private sector.

PurposeThe purpose of this paper is to investigate the effect of female members in boards of directors on asymmetric information in the French stock market.Design/methodology/approachThe authors use two proxies for asymmetric information: the idiosyncratic volatility and the bid-ask spread. This study is conducted on all listed firms in the SBF 120 index between 2002 and 2012.FindingsResults show that gender diversity in boardrooms has a negative effect on the level of private information in stock markets and reduces the bid-ask spread. However, these effects are significant in family-controlled firms: female inside directors significantly increase the idiosyncratic volatility and the bid-ask spread, while female independent directors decrease both proxies for stock market liquidity.Research limitations/implicationsOur empirical findings contribute to the current debate on the benefits of gender diversity on corporate boards from the market perspective. It shows that, under specific conditions, financial markets could be receptive to the presence of female directors in boardrooms.Practical implicationsPractitioners and policymakers advocate the benefits of gender diversity on corporate boards. This paper shows that when the protection of minority shareholders is poor, the stock market is receptive to the presence of women independent directors, only in family controlled firms. This is a further argument that could help women to overcome glass-ceiling barriers they usually face to achieve top management positions.Originality/valueThis paper provides support for the increased attention paid to gender-diverse boards. It addresses the market sensitivity toward the presence of women members in French boardrooms and their positions. This is the first paper, to the best of our knowledge, to address how appointing women to different positions in the boardroom could provide signals to investors in the presence of asymmetric information. French firms are mostly family controlled. Thus, the findings bring valuable information of the impact of board diversity on the stock market considering family and nonfamily firms.